Flipkart Reportedly in Talks to Raise $1.5 Billion in Fresh Funding Round

Flipkart Reportedly in Talks to Raise $1.5 Billion in Fresh Funding Round
Highlights
  • Investors are said to include Microsoft, PayPal, eBay, and Tencent
  • Flipkart is reportedly also in talks with Google Capital, among others
  • Discussions could give Flipkart a pre-money valuation of $10-12 billion

Flipkart is reportedly in talks to raise up $1.5 billion (roughly Rs. 10,038 crores) in a fresh funding round, from investors including eBay, Microsoft, PayPal, and Tencent, at a valuation of $10-12 billion (roughly Rs. 66,921-80,305 crores). Discussions are expected to be finalised with three months' time.

According to a report by Live Mint, citing three people familiar with the matter, Flipkart initially wanted to raise between $500 million (roughly Rs. 3,346 crores) and $1 billion, but is now seeking up to $1.5 billion (roughly Rs. 6,692 crores). The online marketplace is reportedly aiming at a larger funding round due to the success of Flipkart's turnaround under new CEO Kalyan Krishnamurthy, a former eBay and Tiger Global executive.

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Flipkart is also said to be holding discussions with Google Capital, while other financial investors have reportedly also expressed interest in investing. The funding discussions could give Flipkart a pre-money valuation of $10-12 billion, the report adds. This is lower than its previous $15 billion (roughly Rs. 1,00,379 crores) valuation, which, however, reportedly dropped to below $10 billion by late-2016.

The report adds that the funding deal could fall through if investors do not agree with Flipkart's valuation, and that discussions with at least five funds were abandoned after disagreements over valuation. eBay's status as a strategic investor in Flipkart competitor Snapdeal may also affect the deal.

On Monday, Microsoft and Flipkart announced a cloud partnership. Flipkart will start using Microsoft Azure as its public cloud, and the platform will provide analytics to the online marketplace's existing servers. Flipkart is also looking to use Microsoft's AI tools to help provide customers better recommendations, amongst other things. The Azure platform's global scale will also allow for continued growth and expansion, the two companies said, part of Flipkart's 10-year-plan to scale up to 500 million customers.

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Further reading: Flipkart, eBay, Microsoft, Tencent, Apps, Internet
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